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Martha escapes from an abusive cult in the Catskill mountains to a nearby town. In a diner, she is confronted by a cult member who attempts to convince her to return, but she refuses. Martha calls her sister, Lucy. Lucy picks up Martha and takes Martha to the vacation lake house in Connecticut that she shares with her husband Ted.

In a flashback Martha meets the cult leader Patrick for the first time. Patrick christens her Marcy May and welcomes her to the cult.

Martha meets Ted and begins exhibiting strange behavior: swimming in a public lake naked, sleeping all the time, not eating, and arguing with her sister and brother-in-law about how to live. Lucy reveals she abandoned Martha and is now attempting to get her back into her life. Lucy is also trying to have a baby.

In another flashback Martha is seen integrating into cult life and one night wakes up to being raped by Patrick. Patrick convinces Martha that she needs to share herself and be more open with others.

Martha attempts to join Ted and Lucy in bed, but Ted reacts angrily. Martha tells Ted he values the wrong things and Ted calls Martha a freeloader. That night she attempts to contact the cult but is greeted by a girl named Marlene Miller. Martha loses her nerve and hangs up.

In a flashback at the cult, Martha helps a girl named Sally integrate into the cult. She helps Patrick drug and rape Sally, as had been done to her. Patrick attempts to get Martha to kill a cat as well as another cult member, but Martha refuses. She begins participating in the cult's burglaries.

Lucy and Ted host a party. Martha has a psychotic episode when she recognizes one of the bartenders as a cult member and has to be sedated. Ted attempts to convince Lucy to send Martha to a mental institution, an idea Lucy rejects.

In a flashback, Martha watches Patrick and Sally talk intimately. Martha goes on a burglary with the cult that culminates in the stabbing of a man who discovers them, to Martha's shock and horror. Martha has a breakdown in the house. Patrick forcefully subdues her and berates her for her failing to follow the cult's ideals.

In the final scenes, Martha has a nightmare and a panic attack. Ted tries to help her, but Martha kicks him down the stairs. Lucy threatens to send Martha to a mental institution to which Martha angrily responds that Lucy will be a terrible mother. The next day Lucy and Martha reconcile somewhat and Martha goes swimming. She sees a cult member watching her and leaves the water. When the three leave the house, the cult member is seen following their car while Martha says nothing.

While researching, Durkin became fascinated by how someone gets into the farm or commune or group, and made a short film of the name Mary Last Seen about it starring Brady Corbet, who plays cult recruiter Watts in both the short and feature films. Mary Last Seen won the award for best short film at the 2010 Cannes Film FestivalDirectors' Fortnight. While Mary Last Seen was about how someone gets into the cult, Martha Marcy May Marlene was about what happens to someone when they get out of it. Durkin made the short to show the world Martha was in, and also with the intent to send it out with the script for Martha Marcy May Marlene to potential investors.[6]Mary Last Seen was selected for the Sundance Film Festival, and Durkin was given a distribution deal with Fox Searchlight.[7]

The film received highly positive reviews, while Olsen's performance as the traumatized Martha met with critical acclaim; the film holds a 90% "fresh" rating on Rotten Tomatoes, with the consensus capsule stating, "Led by a mesmerizing debut performance from Elizabeth Olsen, Martha Marcy May Marlene is a distinctive, haunting psychological drama."[16] On Metacritic the film has a 76 out of 100 "Metascore".[17]Christy Lemire of the Associated Press named Martha Marcy May Marlene the best film of 2011.[18]Roger Ebert gave the film three-and-a-half out of four stars, describing Olsen as "a genuine discovery ... She has a wide range of emotions to deal with here, and in her first major role, she seems instinctively to know how to do that." Ebert's only major complaint was that the movie's chronological shifts were "a shade too clever. In a serious film, there is no payoff for trickery."[19]